What has become known as the Bettencourt affair, a far-reaching story of corruption surrounding the finances of L’Oréal heiress Liliane Bettencourt, is one of the most damaging scandals for France's political and social elite to have emerged in recent years.
Beginning in 2007 as a high-society squabble between Bettencourt, Europe’s wealthiest woman, and her daughter, it became an affair of state in 2010 after Mediapart and French weekly news magazine Le Point revealed secretly-taped conversations between Bettencourt and her close advisors, exposing evidence of tax evasion, illegal political funding, influence peddling on high and tampering with justice procedures.
As of 7 p.m. on Monday July 22nd, Mediapart has been forced to remove from its site the contents of the recordings, made by Bettencourt’s butler between May 2009 and May 2010, after a ruling by the Versailles appeals court found their publication breached personal privacy laws. Without the publication of the extracts of the tapes, which were meticulously selected on the basis of their public interest - all otherwise strictly private matters were not disclosed - the independent judicial investigations outlined below would undoubtedly never have been opened.
At the time of the recordings, Liliane, now aged 90, and her daughter and only child, Françoise Bettencourt-Meyers, 60, were locked in a bitter feud centred on Liliane’s relationship with François-Marie Banier, a one-time author, celebrity photographer and high-society socialite. Beginning in December 2007, Bettencourt-Meyers launched legal action against Banier for taking advantage of her mother’s frail mental state to receive from her which a police investigation has estimated to be almost 1 billion euros of gifts, including life insurance policies and artworks.
A medical examination ordered by magistrates in June 2011 found that Bettencourt was suffering from “mixed dementia” and said that the “slow degenerative cerebral process” she is afflicted with began in 2006.
Bettencourt-Meyers’ lawsuit led to the opening of a preliminary investigation into the conduct of Banier, while Liliane Bettencourt insisted she had willingly handed him the vast fortune. But the unseemly and very public battle between the richest woman in Europe and her daughter would finally become a far graver affair with the publication in June 2010 of the ‘butler tapes’.
The evidence they provided exposed the dissimulation of part of Bettencourt’s fortune (estimated in March this year at more than 20 billion euros by Forbes magazine), and the shady links between politicians and the world of business and finance. They triggered testimony from other Bettencourt employees, notably her bookkeeper Claire Thibout, suggesting that large sums of cash withdrawn from billionaire’s bank accounts may have been used to finance former president Nicolas Sarkozy’s 2007 election campaign.
The subsequent attempts to stifle the affair, led conjointly by the French presidential office under Sarkozy, by Liliane Bettencourt’s senior advisors and by former public prosecutor Philippe Courroye , were all in vain.
Today, the predators and courtesans who took advantage of the generosity and vulnerability of the L’Oréal heiress, have, one by one, been evinced. The billionaire regained ownership of her private island in the Seychelles, d’Arros, which she had hitherto rented the use of in a perverse financial scheme mounted by her advisors. That meant it was, after years of secrecy, finally declared to the tax authorities, and has since been sold.
As for François-Marie Banier, 66, whose controversial relationship with Bettencourt sparked the original family dispute, a part of his considerable assets gained through gifts from the confused widow has now been seized. The justice authorities have frozen the sums ahead of a decision on whether or not to send him for trial, and the outcome of the eventual case.
Meanwhile, the largest-ever tax adjustment ever made in France, a back payment made by Bettencourt for an estimated 100 million euros stashed in secret foreign bank accounts, the existence of which was first revealed in the transcriptions of the ‘butler tapes’, brought in tens of millions of euros to the state treasury.
Regarding prosecutor Courroye, he was subsequently publicly rebuked for his behaviour in the case, and was eventually transferred to a less prominent post by the higher council of the magistrature, the CSM.
The multiple revelations of the Bettencourt affair also publicly stripped bare the cosy back-scratching behind the tax breaks accorded to the super-rich under the Sarkozy administration’s so-called ‘fiscal shield’ (le bouclier fiscal). As it did also the covert interference in the justice system by the French presidency, and the arrangements and mutual gratifications of the elite donors’ club to Sarkozy’s conservative UMP party, the Premier cercle.
But the result of the affair in terms of issues of public morality and the proper conduct of institutions is perhaps the most far-reaching. Former French president Nicolas Sarkozy is currently placed under investigation, a legal status one step short of being charged, while awaiting a final decision by magistrates as to whether he should be sent for trial (like Banier) for “abusing the frailty” of France’s wealthiest woman.
Sarkozy’s former presidential election campaign treasurer, who later served as his budget minister and labour minister, Eric Woerth, has been sent for trial for “active influence peddling”, accused of obtaining France’s highest award for civil merit, the Légion d’honneur, for Bettencourt’s wealth manager Patrice de Maistre in exchange for Maistre’s hiring of Woerth’s wife Florence as an investment advisor for Bettencourt.
The judicial investigations into the wide-ranging Bettencourt affair have resulted in six separate cases. The principle one of these concerns the alleged abuse of frailty of Liliane Bettencourt and illegal political funding, in which 12 people are placed under investigation and now awaiting a final decision by the investigating magistrates as to whether they will be sent for trial.
They are:
Nicolas Sarkozy: The former French president (2007-2012) placed under investigation for “abuse of frailty” on March 21st 2013.
Éric Woerth: Former budget minister (later labour minister) under Nicolas Sarkozy, treasurer of Sarkozy’s 2007 presidential election campaign, and treasurer of Sarkozy’s conservative UMP party. He was placed under investigation on February 8th 2012 for “passive influence peddling” and, on March 9th 2012, for “receiving” illicit cash payments from Patrice de Maistre.
Patrice de Maistre: Former wealth and investment manager for Liliane Bettencourt, placed under investigation on December 15th 2011 for “abuse of weakness”, “conspiring in breach of trust”, “aggravated fraud” and “money laundering”. He was later additionally placed under investigation on March 22nd 2012 for “misuse of company assets”, and also for “active influence peddling”, on June 12th 2012. He notably spent 88 days in preventive detention, beginning March 22nd 2012.
Pascal Wilhelm: A tax lawyer who succeeded Patrice de Maistre as wealth and investment manager for Liliane Bettencourt, placed under investigation for “abuse of frailty” on June 13th 2012 and also, on February 11th 2013, for “fraud”.
Alain Thurin: Liliane Bettencourt’s former nurse was placed under investigation on July 11th 2012 for “abuse of frailty”.
Fabrice Goguel: Liliane Bettencourt’s former chief tax lawyer was placed under investigation on September 6th 2012 for “abuse of frailty”, “fraud” and “breach of trust” all in connection with his management of the judicial and fiscal arrangements concerning the ownership of Bettencourt’s Seychelles island, d’Arros.
Carlos Cassina Vejarano: A former administrator of d’Arros, he was placed under investigation on October 26th 2012 for “abuse of frailty” and “fraud”.
Patrice Bonduelle: A notary (solicitor) who served Liliane Bettencourt between 2010 and 2011 was placed under investigation in November 2012 for “conspiring in abuse of frailty”.
Jean-Michel Normand: A notary (solicitor) who served Liliane Bettencourt when her will was modified and gifts offered in favour of François-Marie Banier, was placed under investigation on January 15th 2013.
Stéphane Courbit: A reality TV show and online gambling entrepreneur and a client of Pascal Wilhelm, whose company LOV received an investment of more than 143 million euros from Liliane Bettencourt in May 2011. He was placed under investigation on February 19th 2013 “fraud” and “receiving the proceeds of abuse of frailty”.
Under French law, the examining magistrates in charge of a criminal investigation have the ultimate power to decide who should stand trial for offences which, in the magistrates’ opinion, there is “grave or concordant” evidence that they committed. However, the public prosecutor’s office also has a say in the procedure, and makes its own recommendations over who, among those placed under investigation, should or should not, stand trial.
The public prosecutor’s office in Bordeaux, where the cases are managed, has recommended that the cases against Sarkozy, Woerth, Courbit, Bonduelle, Wilhelm and Thurin should be dismissed. It is now for the three magistrates in charge of the investigation, Jean-Michel Gentil , Valérie Noël and Cécile Ramonatxo, to decide the final outcome. Meanwhile, an appeal by the six which challenges the legal validity of their placement under investigation is to be heard by a court in Bordeaux on September 24th.
In a second case, the three judges on July 4th overruled the prosecutor’s recommendation to dismiss charges against Éric Woerth and Patrice de Maistre for influence peddling, and they will now stand trial at a date to be announced.
A third case in the Bettencourt affair concerns the alleged breach of personal privacy concerning the publication of the so-called ‘butler tapes’. The tapes were secretly recorded by L'Oréal heiress Liliane Bettencourt's butler over a period of one year, between 2009 and 2010. They contained conversations between Bettencourt and Patrice de Maistre and other advisors. After Mediapart obtained a copy of the recordings, it began publishing in June 2010 - in audio sequences and transcriptions - those contents that it considered were clearly of a public interest. French weekly magazine Le Point also obtained a copy and similarly published transcriptions from the recordings.
They exposed, among other things, evidence of tax evasion, influence peddling, suspicions of illegal political funding and interference in justice proceedings by a French presidential advisor.
The butler, Pascal Bonnefoy and five journalists have been placed under investigation for the alleged offence. The latter are Mediapart’s editor-in-chief Edwy Plenel, the website’s investigative reporter Fabrice Arfi, former Mediapart investigative journalist Fabric Lhomme (now with daily Le Monde), the editor-in-chief of Le Point, Franz-Olivier Giesbert and its fomer editor, Hervé Gattegno. On July 9th, the Bordeaux public prosecutor’s office recommended that all six should stand trial.
In a fourth related case, magistrate Isabelle Prévost-Desprez was placed under investigation in July 2012 for “violation of professional secrecy” for allegedly passing on to two journalists from Le Monde classified information from her early investigation into the Bettencourt affair. The Bordeaux public prosecutor’s office in June recommended she should stand trial.
In the trail of that, a fifth case involves a lawsuit by Le monde against former public prosecutor Philippe Courroye and his deputy, Marie-Christine Daubigney, for their illegal consultation of the phone records of its journalists investigating the Bettencourt affair. After the two magistrates were placed under investigation, the case against them was overturned by two appeal court rulings, the latest in June. However, further legal procedures engaged by Le Monde could still lead to a new case being opened agaisnt Courroye and Daubigney.
Finally, the largest magistrates’ union, the USM, filed a lawsuit on April 9th against Member of Parliament for the conservative UMP party, Hervé Guaino, a former advisor to Sarkozy when the latter was president, for his alleged “insulting a magistrate” and “the discrediting of an act or decision” of justice. This referred to Guaino’s highly controversial public outburst against Bordeaux magistrate Jean-Michel Gentil after he placed Sarkozy under investigation in March. Guaino said the magistrate had “dishonoured the justice system” and had “dirtied France live and in front of the world”. That case is currently the subject of a preliminary investigation by the Paris public prosecutor’s office. If pursued, Guaino faces a maximum sentence of one year’s imprisonment and separate fines of 15,000 euros and 7,500 euros respectively.
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English version by Graham Tearse